the times | Saturday August 1 2020 1GM 65
Money
David
Byers
Troubleshooter
Write to Troubleshooter,
Times Money, 1 London
Bridge Street, SE1 9GF or
[email protected],
including your phone numberE
ight months after a fire caused
devastating damage to Donna
Campbell’s grade II listed barn
conversion, she is still unable to move
back in because of insurance hold-ups
over repairs.
Donna, 59, who says that she was
lucky to get out of the house near
Warrington safely, is stranded in emer-
gency rental accommodation after a
faulty gas fire caused more than
£100,000 of damage to three bath-
rooms, the living room and one of the
bedrooms as well as the oak floor-
boards. She says the garden “looks like
something out of a Jules Verne novel”.
Although Legal & General, her insur-
er, has agreed to cover the cost of her
temporary new home during months of
delays over her claim, Donna said it
defaulted on her rent payments three
times before correcting its mistake,
adding to her stress. “Eight months on,
my home falls further into disrepair. No
attempt has been made to start works
and I am in despair at the insurers’ lack
of commitment,” she said.
Donna, an occupational health
adviser, does not believe that disrup-
tion caused by the Covid-19 pandemic
is solely responsible for the delays.
“Surveyors were instructed and
inspected the property well before the
lockdown,” she said. “Complaints about
the protracted delay, which I have made
in writing and over the phone, have had
no impact.”
She is also losing money because she
occasionally rented out her home
through Airbnb at weekends. “This
delay is causing avoidable loss of in-
come. My work has also been badly af-
fected by coronavirus, which is causing
me significant financial hardship.”
Donna appointed Brooklin, a claims
management company, to handle her
case after a representative turned up at
the door. She had tried calling L&G
three times, but said she got cut off on
every occasion. “They were impossible
to reach, and I needed help — I barely
had any clothes to wear and I felt I
couldn’t handle things on my own.”
Brooklin is accredited by the Finan-
cial Conduct Authority, the City watch-
dog, and has six offices in the UK.
Donna said that she was told it would
not take any commission from her
insurance payout.
Donna has submitted a complaint
about Legal & General to the Financial
Ombudsman Service.
“I really do not know what I can do at
this stage. I’m watching helplessly as
the insurers continue to disregard myneed to resume my normal life in my
home,” she said.Troubleshooter says:
Legal & General apologised for taking
too long to process Donna’s claim and
for defaulting on her rent payments.
“This falls short of the level of service
we would have expected to provide Ms
Campbell, and we apologise for this.”
The insurer said that some of the
delays were down to Brooklin, because
the claims consultants took four
months to send it details of the repairs
that needed to be carried out. “This was
not received until March 18 and we ap-
proved it,” an L&G spokeswoman said.
Jonathan Mark Ingham, a claims
handler from Brooklin, said that
because Donna’s home is grade II listed
the company needed expert advice.
“Surveyors were backwards and for-
wards with Warrington council and
English Heritage and I even met on sitewith building control during this to try
to speed things up,” he said.
L&G said it is now waiting for Brook-
lin to get quotes for the work. It said it
had advised Brooklin to speed up this
process, which Brooklin says it is doing.
Chris King from Compare the
Market says that while claims manage-
ment companies can be useful in com-
plex claims, they can cause delays.
Some can cost up to 20 per cent of the
payout, but Brooklin takes its commis-
sion from the builders, cleaners and
surveyors who work on the claim.
The Financial Conduct Authority
says that insurers “must handle claims
promptly and fairly”, but there is no
definite timescale. The ombudsman’s
office said it could take four months for
a case handler to be allocated.
L&G says its “top priority is to allow
Ms Campbell to return to her home as
soon as possible”. Donna says she’ll
believe it when it happens.NatWest refuses to say why I can’t have a mortgage
Professionals and the Self-Employed,
a campaign group, said that 76 per cent
of self-employed people have had a
drop in income because of the
pandemic.
Banks are not always open about the
criteria on which their algorithms are
based. Nick Morrey from John Charcol,
a mortgage broker, said: “Many big
lenders use computer systems to make
credit decisions based on a points
element and an affordability
calculation, based on net disposable
income limited by income multiples.
“But the systems have two inherent
weaknesses. First is that the data is
keyed in by a person and we make
mistakes. The second is that the system
is also dependent on data it finds online
— your credit history and anything else
from other searches, which could also
be incorrect. Due to the trust put in
these systems, mounting a challenge is
very difficult.
“Lenders can make it harder to bethe bank has changed its IT algorithms
to become stricter after the lockdown
and I somehow fell foul of them.
“Its only response when I asked was
that it was because of my data. But I’ve
never been turned down for credit
before and I have no debt. I have spent
25 years working for investment banks
and I have run my own business since- My car is on PCP, but absolutely
nothing has changed recently within
my personal finances.”
Mike secured a mortgage with TSB
without a hitch, but would like to know
why NatWest refused him. “My view, as
someone who runs an IT company, is
that it’s my data and I have a right to
know why I was turned down, but
NatWest won’t tell me.”
Troubleshooter says:
Those with less predictable forms of
income, such as the self-employed, are
being subjected to tougher loan checks.
The Association of IndependentSix months ago Mike O’Brien, from
Hexham near Newcastle-upon-Tyne,
had the perfect credit rating, a healthy
bank balance and a 50 per cent
mortgage offer from NatWest on a
£530,000 house, repayable over 15
years. Unfortunately his purchase
stalled during the pandemic and the
mortgage offer expired after six
months.
Mike’s IT consultancy business,
Opencast Software, has a turnover of
£10 million a year, and supplies some of
Britain’s biggest banks. “I’m fortunate,
with the type of clients I have, that they
always pay on time,” he said.
After the lockdown eased and the
property market reopened, Mike, 55,
applied to NatWest again for a larger
mortgage of £324,000 over a 14-year
term, but was turned down without
explanation.
“I’ve had a mortgage with NatWest
since 2012 and I have a credit score of
999,” he said. “I can only assume that
accepted for a mortgage at any time by
simply increasing the number of points
required to get an ‘accept’ decision.
Again, they never make this public.”
Jonathan Harris from Forensic
Property Finance, another broker, said
that self-employed people were being
asked for more proof of income before
they can get a loan. “Some lenders are
taking 20 per cent off that income for
mortgage purposes.”
A NatWest spokeswoman said that,
despite the stability of Mike’s income,
his new application for a higher amount
had broken affordability rules and that
its credit scoring had changed.
Mike said: “My company has HMRC,
the DWP, the NHS, Morgan Stanley,
JP Morgan, RBS, Barclays and Sage as
clients. It’s been profitable from day one
and has been going for eight years. We
made about £1.2 million profit the last
two years after tax. I think it would be
hard to find a more stable business at
the moment. This is crazy.”ILLUSTRATION BY JAMES COLTMANHow long must I wait for
insurer to repair my barn?
Have your say
Our report into the costs of
investing in Chase de Vere’s
ready-made portfolios (Advice
giant’s premium price tag for
failing funds, July 25) led to
some spirited arguments for and
against financial advisers:
“I’m not aware of any financial
advisers struggling to gain clients.
In fact there is a genuine advice
gap as many advisers leave due to
escalating regulatory costs and
insurance. There are crooks in our
profession and it is not Chase de
Vere, SJP or HL (I do not work for
any of these). Sadly the genuine
rogues get away scot free and the
decent advisers compensate the
misadvised. Now that’s a story.”
David Brown“Charges really matter, in an era
of much lower returns, paying
2 per cent pa on a portfolio that
holds 60 per cent bonds earning
sub 1 per cent is clearly not a great
idea. Some people need their
hands holding and paying 2 per
cent pa would still be good value.
Some would benefit from a fixed
fee to be pointed in the right
direction, with a low-cost
portfolio and advice on an ad hoc
basis. The percentage model can
be too little or too much
depending on portfolio size.”
Hari“Difficult to understand why so
many people still go to firms like
CDV or St James Place and pay
eye watering fees. It is a testament
to the marketing skills of their
representatives. That of course is
the point. These firms’ principal
skill is as snake oil salesmen, not
investment expertise.”
GrumpyWe reported on the repayment
window for self-employed
workers who wrongly took
grants (The phoney claims
amnesty: 90-day deadline to
come clean, July 25):
“The chancellor made it too easy
to get the money fraudulently. We
all know of dozens of people who
have milked the system — the
trouble is, it will be very difficult
to get it back. I can’t see many
volunteering to come clean.”
Groovy Gran“Ah, the old ‘hand yourselves in’
threat, which translates into, we
don’t know who you are and we
don’t have the resources to catch
you. Just wait until they try to get
the Bounce Back Loans back (up
to £50,000). I hear that many
small businesses are planning to
close and start up again under a
different name. Many who got
these used the money to pay off
personal debts that charged
higher interest.
Striker“It has exposed those who
underestimate their income to
HMRC by not putting everything
through the books. Fraud has
come back to bite them.”
Paddy F“My partner and I got the bounce
back loan and it’s still sitting there.
We weren’t going to turn down
cheap easy finance. If we need it
we will use it, or we will pay it
back — I suspect the majority of
prudent businesses will.”
Greg Bowman